LNG: a game changer for the EU s transport and power sector

Transcription

1 LNG: a game changer for the EU s transport and power sector European Energy Forum - Dinner debate Brussels 24 th May 2016 Kari Hietanen Timo Koponen 1 Wärtsilä PUBLIC EEF Dinner Debate May

2 TOWARDS GAS AGE WHY WE ARE TALKING ABOUT LNG? Sustainability of Energy and Transport Security of Supply Competitiveness 2 Wärtsilä PUBLIC EEF Dinner Debate May

3 Demand by region in Billion Cubic Meters Percentage of total energy demand Natural gas a strongly growing market World Energy Outlook by IEA: NATURAL GAS DEMAND DEVELOPMENT % % 20% 15% 10% 5% Latin America Africa Middle East Asia E.Europe/Eurasia Asia Oceania Europe Americas % of total demand % Driven by non-oecd countries gas demand is expected to increase by ~50% to 2035 The adoption of gas is driven by both economics and environmental factors NOTE: IEAs (International Energy Agency) New Policies Scenario takes into account broad policy commitments and plans that have already been implemented to address energy-related challenges as well as those that have been announced, even where the specific measures to implement these commitments have yet to be introduced 3 Wärtsilä Wärtsilä PUBLIC EEF Dinner Debate May

4 Natural gas global gas resources TCF North America Europe OECD Middle East Russia/ Caspian* Unconventional Asia Pacific 10 5 Conventional Latin America Africa 0 World Technically recoverable reserves providing more than 200 years coverage at current demand However it is estimated that only in North America unconventional gas production is reaching any significant volumes during the period until Wärtsilä Wärtsilä PUBLIC Source: Exxon Mobile Energy Outlook EEF Dinner Debate May

5 Wärtsilä Corporation Approximately 18,800 professionals In over 200 locations Energy Solutions Marine Solutions Services In more than 70 countries Net sales by business 2015 Marine Solutions 34% Services 44% Listed in Helsinki 5 billion turnover Solid financial standing Energy Solutions 22% Energy efficient solutions Gas based technology Innovative solutions 5 Wärtsilä PUBLIC EEF Dinner Debate May

6 YOUR SHORTER ROUTE TO THE GAS AGE 6 Wärtsilä PUBLIC EEF Dinner Debate May

7 Role of LNG in the future Past/Today Future Usage Baseload energy generation Household usage Process fuel fo industry Balancing energy generation Transporation Industry usage Energy storage Others Supply Gas reservoirs Shale gas Bio gas Coal bed methane Infrastructure Pipeline gas Large LNG terminals Small scale LNG Local/Regional redistribution Bunkering facilities Markets Fixed terms Large volumes Few suppliers Few customers Flexible terms New customer segments New suppliers Lower volumes 7 Wärtsilä PUBLIC EEF Dinner Debate May

8 Benefits of LNG 1. Reduced emissions: LNG - NO x emission reduced by 85% - SO x emissions reduced by 99% - Particulates reduced by 95% - CO 2 emissions reduced by 20-30% - No smoke - Reduced waste streams (liquid waste) 2. Transition fuel to low carbon energy systems 3. Provides an energy storage 4. Emission control area compliant in shipping LNG infrastructure and markets 1. Improved security of supply - Diversified sources 2. Enables flexible gas usage - E.g. for flexible balancing and peaking plants, industrial use of gas, storage 3. Improved functioning of European gas market - Versitale source of gas and more competition 4. Increased competitiveness - Declining LNG prices - Flexible gas fired power plants -> energy efficiency and system optimisation 5. Enables the more efficient utilization of more sustainable fuels - Biogases from various sources 8 Wärtsilä PUBLIC EEF Dinner Debate May

9 TECHNOLOGY AS ENABLER Exploration & Drilling Production & Liquefaction Transport & storage Receiving terminals & Regasification Distribution & transport to the users 9 Wärtsilä 24 May 2016 EEF Dinner Debate May

10 TECHNOLOGY AS ENABLER Wärtsilä gas engine (DF) references >1,500 engines > 16 million running hours MERCHANT OFFSHORE SPECIALS CRUISE & FERRY DUAL-FUEL CONVERSION 2 STROKE DUAL-FUEL DUAL-FUEL POWER PLANTS 881 ENGINES 132 ENGINES 46 ENGINES 66 ENGINES 36 ENGINES 35 ENGINES 376 ENGINES 204 LNG carriers 14 Tankers 11 LPG carriers 4 Containers 3 Bulk carriers 2 Car carriers 24 Offshore supply vessels 6 FPSO vessels 2 FSO vessels 1 Jack-Up rig 16 IWW vessels 6 Tugs 1 Navy vessel 1 Icebreaker 1 Hopper Dredger 1 Guide ship 1 Cable Layer vessel 12 Ferries 3 ROPAX vessels 1 Cruise and ferry 4 FPSO vessels 3 Ferries 2 RORO vessels 1 IWW vessel 1 Chemical tanker 10 Large LNG carriers, 2 engines each 6 Container Feeder vessels 4 Chemical tankers 4 Asphalt Carriers 1 Small LNG carrier 82 plants Output 5,031 MW Online since Wärtsilä PUBLIC EEF Dinner Debate May

11 LNG AS A GAME CHANGER GAS/LNG EU Alternatives, if any? Significant source of energy Available for the future needs LNG enables worldwide gas availability Over 50% expansion in global LNG supply over the next few years. Multiuse in transport, industry and energy Sustainability of transport and power sector Facilitator of flexible power system, successful integration of solar and wind Clean power for transport Security of supply Flexible energy storage Diversified energy sources Competitiveness Declining LNG prices Flexible gas fired power plants - > energy efficiency and system optimisation Electrification is an option for transportation, but in terms of heavy-duty vehicles and shipping, LNG is the best viable commercial option. Biogas (limited scale) but, gas infrastructures are renewable - ready, i.e. biogas can be used in LNG infrastructure. Compressed Natural Gas Other fuels for limited uses, e.g. methanol 11 Wärtsilä PUBLIC EEF Dinner Debate May

12 WHAT IS NEEDED FROM POLICY MAKERS Develop a stable policy framework Develop sufficient LNG infrastructure and services Harmonize LNG regulations in shipping Develop an internal energy market Highlight the important role of the gas Long-term investments require a stable business climate Finalize and implement key policies Develop functioning gas markets Optimized gas network for energy and transport sector Including storage and bunkering facilities Including also small-scale LNG infrastructure and services Harmonize emissions and safety regulations at least in the European level, preferably globally LNG bunkering regulations in ports. Existing system operation principles and market mechanisms do not reveal the full value of flexible power generation New EU policies should provide clear market signals for investing in flexibility 12 Wärtsilä PUBLIC EEF Dinner Debate May